Press Release No: Plenary Assembly 15/18
06.10.2018

PRESS RELEASE CONCERNING THE DECISION DISMISSING THE REQUEST FOR ANNULMENT OF CERTAIN PROVISIONS INCLUDING THE RULES ON THE UTILIZATION OF PUBLIC HOUSING

The Constitutional Court dismissed, at its meeting dated 5 July 2018, the requests for annulment of; the paragraphs added to Article 9 of the Mining Law no. 3213 dated 4 June 1985, by Article 47 of the Law no. 7061 on Amendments to Certain Tax Laws and Other Laws dated 28 November 2017; Paragraph 5 added to Article 4 of the Law no. 4706 on Utilization of Properties Belonging to the Treasury and Amendments to the Value Added Tax Law, by Article 58 of Law no. 7061; and Provisional Article 29 added to Law no. 4749 on Regulating Public Finance and Debt Management dated 28 March 2002, by Article 71 of Law no. 7061, in the file no. E.2018/7, as the contested provisions were not in breach of the Constitution.

A. Paragraph added to Article 6 of Law no. 3213 by Article 47 of Law no. 7061

Contested Provision

The contested provision stipulates certain incentive rules for the mining activities to be carried out in public forests and vests the Council of Ministers with the power to make decisions as incentives.

Grounds for the Request for Annulment

It was maintained that with the contested provision; certain amounts to be paid to the public administrations due to the mining activities carried out in forests would not be charged or less amounts would be charged; this situation would lead to a rapid decline in forests as well as to environmental pollution, contrary to the fundamental aims and duties of the State; and the executive authority was vested with a power in an unspecified area with no definite borders. In this scope, it was claimed that the abovementioned situations did not comply with the principle of certainty which is a requirement of the rule of law and that therefore the contested provision was in breach of Articles 2, 5, 56 and 169 of the Constitution.

The Court’s Assessment

In brief, the Constitutional Court has made the following assessments:

Pursuant to Article 169 of the Constitution, the State shall be entrusted with the duty to enact the necessary legislation for the protection and extension of forests. Acts and actions that might damage forests shall not be permitted. In addition, public forests shall not be subject to easement, unless the public interest is served.

It is at the discretion of the legislator to decide on certain incentives for spread and development of mining activities and to determine the scope and nature of these incentives, provided that the constitutional principles and rules are complied with. Review of whether the public interest will be served with the regulations in this respect or the extent to which it will be served falls into the scope of substantive review, but not the constitutional review.

According to the reasoning of the relevant article, the contested provision aims at making the mining site tenders and investments attractive and improving the investment environment. In accordance with this expression, it cannot be said that the contested provision pursues a special purpose other than the public interest.

While the contested provision encourages mining, it also ensures the protection of forests and environment by preserving the public interest and the necessity elements required for carrying out mining activities in public forests and §by prescribing that the forestation price required for afforestation of the permitted area shall be collected in any case. Thus, the legislator has struck a balance between the two conflicting public interests.

The contested provision does not prevent the conduct of mining activities in forests under certain conditions and within certain limits stipulated in the legislation concerning these activities. Nor does it prevent the collection of the forestation price in any case or collection of a deposit payment as a guarantee for securing the mineral rights duty and additional mineral rights duty, as well as the debts and commitments stated in the written contract. In addition to these, also considering that the expenses related to the protection and reclamation of the forests may also be covered by the appropriations to be specified in the budget laws, it cannot be said that the rules, which are laid down by the legislator and stipulate certain incentives that vary according to the characteristics of the mining sites and are set for a definite period of time, do not comply with the State’s obligation to protect and improve the forests and the environment.

Consequently, the Court concluded that the contested provision was not in breach of the Constitution, and therefore dismissed the request for annulment.

B. Paragraph added to Article 4 of Law no. 4706 by Article 58 of Law no. 7061

Contested Provision

The contested provision provides that except for those used by the officials holding office in defence, security, judicial and intelligence services, the public housing owned or utilized by the general public administrations, the revolving funds, the funds, other public administrations established under special laws -except for the professional organizations with public institution status-, the state economic enterprises and their subsidiaries and establishments, as well as, the other associations and companies, more than 50 percent of whose funds are publicly owned, shall be introduced into the economy. In this scope, the incumbent administrations shall be authorized for conducting any acts and actions regarding the housing owned by the local administrations, while the Ministry of Finance shall be authorized regarding the others.

Grounds for the Request for Annulment

It was maintained; that there was no public interest in selling the public housing; that the concepts specified in the provision were not clear and understandable; that thus, the contested provision vested the Ministry of Finance with an indefinite discretionary power –the basic principles and framework of which was not determined and which may be used arbitrarily– concerning the public housing. It was therefore claimed that the contested provision was in breach of Articles 2, 6, 7, 8, 123 and 127 of the Constitution.

The Court’s Assessment

In brief, the Constitutional Court has made the following assessments:

The institutions whose public housing will be introduced into the economy, the manner of this process and the competent administrations are clearly specified in the contested provision which includes no uncertainty. Therefore, the provision is not in breach of the principles of legal certainty and inalienability of the legislative power.

It is at the discretion of the legislator to extend or reduce the allocation and use of public housing and to envisage different regulations in this respect by considering certain services, provided that the principles and rules set out in the Constitution are complied with. In the constitutionality review of such regulations, the Constitutional Court confines itself to examine whether the relevant provision serves the public interest.

Regard being had to the reasoning of the relevant article, it appears that the contested provision pursues no special purpose other than the public interest.

Besides, it is at the discretion of the legislator –as a matter of political preference– to decide whether the introduction of the public housing into the economy complies with the requirements of the public sector and serves the public interest. Thus, this issue falls into the scope of substantive review, but not the constitutional review.

Given the contested provision, it cannot be said that introducing into the economy the public housing which is afforded to the personnel as an estate opportunity and does not have a direct relation with the fulfillment of the local services for which they are responsible as part of their duties constitutes an interference with the financial autonomy of the local administrations. Besides, regard being had to Article 4 § 7 of Law no. 4706 which provides that the revenue to be obtained by selling the public housing shall be recorded as revenue in the relevant administration’s budget, it is understood that there will be no decrease in the assets of the local administrations. The introduced regulation solely provides that the real properties shall be turned into cash.

The issue as to the introduction into the economy of the public housing owned or utilized by the decentralized administrations is also at the discretion of the lawmaker, therefore it is clear that the provision as to the introduction of the public housing into the economy does not affect the autonomy of the relevant institutions and is not in breach of the Constitution.

In addition, although it was maintained that the contested provision was in breach of the principle of the integrity of the administration, which represents the relationship between the central administration and the decentralized administrations, as well as the authorities granted to the central administration in this respect, it is clear that the contested provision, which grants no authority to the central administration in this respect and which stipulates that, save for exceptions, the public housing owned or utilized by the central administration and the decentralized administrations shall be introduced into the economy, is not contrary to the principle of the integrity of the administration enshrined in Article 123 of the Constitution.

Consequently, the Court concluded that the contested provision was not in breach of the Constitution, and therefore dismissed the request for annulment.

C. Provisional Article added to Law no. 4749 by Article 71 of Law no. 7061

Contested Provision

The contested provision stipulates that the net debt utilization amount applicable in 2007 –being effective as of 1 January 2017– shall be calculated by adding 37 billion Turkish liras (TRY) to the net debt utilization amount increased by the Minister and the Council of Ministers to which the Undersecretariat of Treasury is attached.

Grounds for the Request for Annulment

It was maintained that with the contested provision; the executive authority was allowed to use additional borrowing irrespective of the income and expense figures set out in the budget; while the authority to use additional borrowing should have been granted to the executive authority by the additional budget law, it was granted by an ordinary law, which was contrary to the budgetary discipline; the accountability was prevented; arbitrary expenditures were encouraged; and the power of the purse enjoyed by the Grand National Assembly of Turkey (“the GNAT”) was taken away. In this scope, it was claimed that the contested provision was in breach of Articles 2, 87, 161 and 163 of the Constitution.

The Court’s Assessment

In brief, the Constitutional Court has made the following assessments:

The net debt utilization limit shall be determined by taking into consideration the original appropriations set out in the budget law of the year and the estimated revenues. It is not directly specified in the budget law. In fact, it is prescribed in Article 5 of Law no. 4749, which is general and not provisional, that the said limit shall be determined according to the budget law of the year.

Although the amounts of the original appropriations of the year, as well as the estimated revenues shall be determined by the budget laws, general and abstract rules regarding the determination of the net debt utilization limit are not required to be included in the said law.

Accordingly, the provision which prescribes that the net debt utilization amount shall be increased for 2017 is not in contradiction with the budgetary provisions of the Constitution.

In addition, pursuant to Law no. 6085 on Turkish Court of Accounts of 3 December 2010, all types of domestic and foreign borrowing on the part of the public administrations shall be audited by the Court of Accounts. The contested provision which has introduced no amendment in this respect cannot be said to prevent accountability and to encourage arbitrary expenditures.  

Consequently, the Court concluded that the contested provision was not in breach of the Constitution, and therefore dismissed the request for annulment.

This press release prepared by the General Secretariat intends to inform the public and has no binding effect.

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